The Interest Reward product is available under the lender’s Horizon 300 and above range, and the overall Horizon offering was expanded in March last year. It offers a reduced rate to borrowers if they agree to a regular payment plan on their lifetime mortgage.
The regular payments will be for a set period and allow for lower compound interest. The discount will depend on the percentage of interest served and the length of the contractual term. The discounted rate will apply for the duration of the mortgage.
For example, if a borrower agrees to a five-year payment plan where they pay 50 per cent of the interest owed, Standard Life Home Finance will give them a 0.05 per cent discount on the rate.
The range is open to borrowers aged between 55 and 84 up to 50 per cent loan to value.
Kay Westgarth (pictured), sales director at Standard Life Home Finance, said: “As the later life industry continues to evolve in lockstep with customer demand and regulatory reform, the need for a more diverse and comprehensive product offering has never been more profound. We are thrilled to be able to offer this new Interest Reward product to customers, providing a payment option that rewards customers who commit to regular payments with a discount on interest rates.
“Given the current climate, this payment plan is our way of ensuring equity release customers can access the rates that best suit their individual financial situation.”
Westgarth added: “We look forward to working closely with advisers to ensure our equity release customers can take full advantage of the Interest Reward product, whether it’s to bolster their current finances or to fund a comfortable retirement.
“A contractual payment plan may not suit everyone, but it’s our duty to ensure that we continue to support the unique needs of a wide range of customers and their differing financial situations.”
